Journal of Property Management

LEGAL EASE
FIxTURE VS. TRADE FIxTURE Rely on the law to
resolve these landlord/tenant disputes

PETER C. SALES (pSalES@babc. com) IS AN ASSOCIATE ON THE LITIGATION TEAM AT BRADLEY ARANT BOULT CUMMINGS, LLP, SPECIALIzING IN TRIAL LITIGATION AND COUNSELING.

in tOday’s ecOnOMic cliMate there has Been unPrecedented tenant turnOver. This turnover often is not a result of an expiring lease, but instead due to nonpayment of rent resulting from business failure. As a result of this increase in business failures, both tenant and landlord are often left fighting over the bones of an otherwise dead company.

One issue becoming more and more prevalent in today’s landlord/tenant disputes is whether something is a “fixture” or a “trade fixture.” The resolution of this issue can determine whether the tenant or the landlord gets to keep the “stuff.” This is an issue because, generally under common law, once something becomes a fixture, it belongs to the landlord. However, there is an exception to this rule. See Supreme Oil Co. v. Metropolitan Transp. Authority, 1997 WL 607544 (S.D. N. Y. 1997); Fondren v/ K/L Complex Ltd., 800 P.2d 719 (Nev. 1990).

Typically, a trade fixture is something that the tenant has affixed to the freehold, which can be removed without damage, and which was affixed for the purpose of carrying on the tenant’s particular line of business. As such, unless the lease specifically speaks to the contrary, it is a possession of the tenant and may be removed.

Conversely, if something is affixed to the
freehold and either cannot be removed without
significant damage or was not directly related
to the tenant’s business, then it is a fixture and
belongs to the landlord.